The Deerwood Auditorium is a prime example of a modern municipal facility made possible by the relief programs of the New Deal. It provided local residents with an auditorium and gymnasium space, council chambers, a library, and a fire hall. The building expanded the range of services available to the residents of Deerwood and enhanced their quality of life.

As early as June 5, 1933, the minutes of the Village Council in Deerwood showed an interest in using the federal aid of the New Deal. Beriah Magoffin Jr., a local citizen, secured an option on a parcel of land occupied by the Hilyar Oil Station. He donated it to the village for the auditorium. He had also bought a building from the Evergreen Mining Company located at the Meacham Mine. The structure could be dismantled and its materials used for a new building.

In a special session on October 9, 1934, the Village Council met with Fred Pfeifer, the supervising architect of the State Emergency Relief Administration (SERA), to discuss the construction of the building. The architect estimated that eight hundred tons of stone would be needed to face the exterior of the building.

Deerwood's community hall project was built by local funds and relief labor at a cost of $43,000. In early March 1935 a crew of twenty-five men began hauling the stone to the site. By mid-month about one-third of the rock had been transported. Most of it was gathered from the Cuyuna Country Club golf grounds. By early April excavation for the basement and trenches for the foundation footings had begun.

On August 2, 1935, construction was stopped with only a portion of the walls completed. The work programs of SERA had been cancelled and transferred to the Works Progress Administration (WPA). However, all current SERA projects had to be resubmitted to the WPA for approval before work could resume. In late August, Victor Christgau, the state WPA administrator, announced that the project had been approved, and work continued.

However, in August 1936 it was announced that work on the auditorium would cease because funds had been depleted. It was necessary to wait for a new appropriation. The workers were assigned to other WPA projects, but five stayed on to complete the auditorium's roof. By early September the walls were complete. It was hoped that interior work would be finished by November for the town's annual lutefisk dinner.

Additional funds for the building were approved by the WPA in early October. Work on the building resumed with a full crew. When the lutefisk dinner was held in late October, attendance was estimated at 1,000.The Deerwood Enterprise noted that, "The new municipal auditorium thus received its initiation as a community center for Deerwood activities." By February 1, 1937, the Village council was meeting in the new building.

The finished Deerwood Auditorium was a large, rectangular, two-story building. It featured reinforced concrete walls faced with split field stone and Modern-style cast stone trim. A medium pitch gable roof completed the building. The auditorium became home to the city council, the public library, fire apparatus, and later the police department. The gymnasium and kitchen allowed the building to be used constantly for a variety of purposes. Sporting events, community meetings, plays, and banquets were all held in the building.

The exterior of the auditorium was renovated in 2010 to preserve its historic appearance. In 2014 it remained the town's most prominent building.